Pernod Ricard Reports 2% Organic Sales Decline in First Quarter

Pernod Ricard, the world's second-largest producer of wines and spirits, announced its first-quarter results for fiscal year 2024, ending September 30.

The group's consolidated sales reached €3,042 million, an organic decline of 2% and a reported decrease of 8% attributed to unfavorable foreign exchange rates. The company described this as a soft start to the year, particularly in the United States and China, due to high comparison bases and a normalizing market context. This decline was partially offset by dynamic performance in other parts of Asia, modest growth in India, and resilience in Europe and travel retail, highlighting the group's diversified geographic footprint.

Despite the sales dip, Pernod Ricard achieved a strong price/mix effect of +7%. This improvement was driven by price increases implemented last year across various brands and markets. The company noted that the quarter's performance was generally positive, even with challenging comparative figures in some regions.

In its key "Must-Win" markets, the United States saw an 8% decline in net sales, attributed to normalizing consumer demand and inventory adjustments at the retailer level. China also experienced an 8% sales decrease, impacted by a challenging macroeconomic environment and cycling a record comparable period. Conversely, India showed modest growth of 1%, and global travel retail remained stable. Europe recorded a 1% increase, while the Asia-Rest of World region (excluding China) was stable, showing strong growth elsewhere.

Pernod Ricard remains confident in achieving its mid-term financial targets for FY23-FY25, aiming for the upper end of 4%-7% organic net sales growth and a 50-60 basis point improvement in organic operating margin. For FY24, the company anticipates broad-based organic sales growth, with positive outlooks for the US and China, and strong growth expected in travel retail and India.